Are you eligible for a rebate of your Mastercard / Visa transaction charges?
27th July 2016
A recent decision by the Competition Appeals Tribunal could provide the basis for retailers who accept payments by MasterCard and/or Visa to recover historic overpayments which they have made to the card issuers.
In the relevant case before the Competition Appeals Tribunal, Sainsbury’s was awarded £68.5 million in damages against MasterCard, with a further award of compound interest to come.
What had MasterCard done?
They entered into an anti-competitive agreement which fixed the multilateral interchange fees (MIFs) payable by retailers to the card issuers in respect of every transaction in which a customer elects to pay using the relevant payment card. In the Sainsbury’s case it was found that the fee was fixed at a level 50% higher than that which could have been negotiated in the absence of the anti-competitive agreement. The case was prompted by a European Commission finding in 2014 that MasterCard had infringed competition laws in the way it set MIFs. Visa was also subject to similar investigations by the European Commission which it resolved via commitments as to future behaviour.
Do you have a claim?
If you have paid MIFs in the period prior to 9 December 2015 you may be in a position to recover any over payment. The extent of recovery could be between 40 and 50% of the original fees paid. Further, interest may be payable particularly if you reduced reserves or increased borrowing to fund the fees.
Isn’t bringing a competition law claim difficult?
It may well be easier than you think. Cases can be issued in the Competition Appeals Tribunal, before expert judges. In contrast to the High Court, where issue fees can be up to £10,000, there are no fees payable on issuing in the Competition Appeals Tribunal. Also, Ward Hadaway have a number of clients in this sector and contacts with other firms and leading barristers; it is possible that a collective claim will be pursued against MasterCard, Visa or both.
What are your next Steps?
Contact one of our Competition Law experts who will be happy to give you some initial guidance on a cost and commitment free basis.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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